Vegetarian sausages from Beyond Meat Inc, maker of vegan burgers, are displayed for sale at a market in Encinitas, California, June 5, 2019.
Mike Blake | Reuters
Except meat reported a narrower-than-expected fourth-quarter loss on Thursday despite a more than 20% drop in sales.
The company’s shares rose 14% in after-hours trading.
Here’s what the company announced compared to what Wall Street expected based on a survey of analysts by Refinitiv:
- Loss per share: $1.05 vs. $1.18 expected
- Revenue: $79.9 million vs. $75.7 million expected
For the fourth quarter, Beyond reported a net loss of $66.9 million, or $1.05 per share, narrower than a net loss of $80.4 million, or $1.27 per share, a year earlier. Net sales fell 20.6% to $79.9 million.
Beyond said total meat substitutes sold fell 16.9% in the quarter. The company said demand for meat alternatives across “all channels” remains weak. In response, it offers its products at discounts to lure inflation-weary customers. Beyond’s net income per pound fell 4.4% in the quarter.
U.S. sales fell 20.9% as the company saw weaker demand in both its food and grocery segments. Likewise, outside the US, Beyond reported a 19.9% decline in revenue, supported by a steeper decline in food sales.
And the company predicts that its sales will continue to decline in 2023.
Beyond expects its 2023 revenue to range from $375 million to $415 million, representing a 1% to 10% decline in revenue. Wall Street had expected annual revenue to range from $322 million to $496 million.
Rather than revenue growth, Beyond’s main business goal is to be cash-flow positive in the second half of 2023. Its gross margins are expected to be in the low double digits and to gradually increase over the course of the year.
Beyond – and the wider mass alternatives category – have struggled for more than a year and a half, despite seeing rising demand in the early days of the pandemic. Customers who tried expensive meat substitutes did not stick with the products, especially as inflation pushed food prices higher.
In response, Beyond deviated from its original strategy of growing sales by launching new products and partnering with major fast-food chains to focus on conserving cash and moving toward profitability. She completed two rounds last year dismissallaying off more than a fifth of its workforce.
Others in the plant-based meat category had to make similar decisions as demand dried up. Impossible Foods is supposedly will lay off 20% of its workforce after laying off 6% of its workforce last year. Kellogg scrapped its plans to spin off and potentially sell its plant unit, which includes Morningstar Farms.
